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Savings and term deposit accounts are both used to save money, and both have their advantages, but it's important to know the difference between the two so you can decide which one suits your specific needs.

Savings accounts

A savings account is a type of bank account that allows you to earn a better rate of interest on your balance unlike an everyday transaction account. Some encourage regular saving by paying bonus interest if you save a certain amount every month and don’t make any withdrawals – like the P&N Bank SwiftSaver, and savings accounts offer flexibility with easy access to your money.

Savings accounts are typically used for shorter term saving goals, such as saving for an emergency fund or a holiday, and they are good if you are consistent saver.

Term deposits

A term deposit is a type of account that pays a fixed rate of interest for a set period of time, and this is known as the term. The term can range from a month to several years, and you’ll usually find that the longer the term, the higher the interest rate.

Term deposits typically have a higher interest rate than savings accounts, but you can’t access the money in a term deposit until the term is up without paying a penalty, and this means they’re not for everyone. You also usually need to have some savings already to be able to open a term deposit – for example, at P&N Bank the minimum opening balance on a Money Maker or Regular Income term deposit is $5,000.

Deciding what’s best for you

So, which option will you choose? Simply put, it should come down to whether you prefer flexibility or certainty.

Term deposits are great for those who want to know exactly what their return will be, and that their money will be safely out of reach. Bear in mind that this certainty comes at the expense of flexibility though, as your funds are locked away until the end of your term and you can’t add more money to your term deposit balance during your term either.

Savings accounts are great for regular saving, and for those people who may need to access their savings balance from time to time. The flexibility of a variable interest rate can also be beneficial to helping your balance grow.

Both options are secure, thanks to the Financial Claims Scheme (FCS). The FCS ensures certain deposits are protected up to a limit of $250,000 for each account holder

Reader reminder: None of P&N Bank’s savings or term deposit accounts charge a monthly fee.

Still not sure?

Since there are a wide range of savings accounts available, it’s understandable that you could be finding it difficult to choose between them. Our Savings and Term Deposit Calculator is a handy tool to use when you’re wanting to get your savings in order. Change the term length, account type, opening balance and deposit frequency, to simply see how much your money can grow.

For assistance in finding the right accounts for you and your family, you can visit your local P&N Bank branch or speak with a team member today.


Banking and Credit products issued by Police & Nurses Limited (P&N Bank) ABN 69 087 651 876 AFSL/Australian Credit Licence 240701. Any advice does not take into account your objectives, financial situation or needs. Read the relevant T&Cs, before downloading apps or acquiring any product, in considering and deciding whether it is right for you. The Target Market Determinations (TMDs) are available here or upon request.